From the first glimpse of an elegant, blue-stockinged leg kicking playfully from the Rhine, to the final image of the lustrous Perspex rainbow bridge which leads the doomed gods to Valhalla, Scottish Opera's Das Rheingold cast a potent spell. Rarely does a new Ring cycle begin with such confidence and lucidity, on stage and in the pit. This bodes well for Wagner's four-opera saga of gods, dwarves and dragons, being spread across four seasons leading to a complete cycle in 2003. Perversely, like Wotan's own building plan, this troubled but resolute company rises to ever greater artistic heights as its finances slip further into chaos.

A new Ring, especially since an equally promising effort was abandoned for lack of cash in 1991, is its most challenging undertaking yet. Judging by this first instalment, it may also be one of the most rewarding.

Under the experienced, unflappable baton of Richard Armstrong, Wednesday's second-night performance surpassed expectation. His sense of pacing and architecture was faultless, drawing a steady symphonic growth from those famous opening E flat arpeggios. In clumsy hands, this densely plotted forerunner of all prequels, the most action-packed of the four, can seem to lurch nervously from episode to episode, climax to climax. Not here. The expanded orchestra, with added bass trumpet, contra bass trombone, special Wagner tubas and five harps which give this work its distinctive timbre, at turns scintillating and louring, played with admirable finesse. The fresh-voiced cast, most new to their roles, matched up with thoughtful, committed performances, fully entering into the spirit of Tim Albery's perceptive staging (designed by Hildegard Bechtler, with costumes by Ana Jebens and lighting by Wolfgang Göbbel).

Since this was Scotland, the gods wore ankle-length gaberdine kilts, Loge a kind of tartan-knitted waistcoat. Otherwise, the look was timeless modern costumes against abstract, spangly backdrops. Fricka's handbag and mackintosh would have suited the Queen at any period in her reign, the Rhinemaidens wore saucy tennis dresses, Rapunzel-length hair and suspenders but were much prettier than some Michelin models seen of late in Bayreuth and at Covent Garden. The giants' janitorial overalls and peaked hats belonged to the sort of petty low-ranking official who can ruin your day with a recitation of the rule book. They negotiated their gold ransome for the kidnapped Freia with all the dogged, gormless determination of a ticket collector extracting an excess fare.

The distinction between gods and Nieblungen, capitalist and worker, oppressor and oppressed on which the work turns - whichever particular political gloss you choose to put on it, Wagner's view of society's greed is unmistakable - was discernible but not heavy-handed. Albery seemed keen to avoid any narrow prescription, preferring storytelling to dogma, character to symbol. Wotan gave off a Getty-like air of miserly, gnawing coldness, his 'black dwarf' counterpart Alberich (the snakishly convincing Peter Sidhom) a warmer than usual humanity. Both are power-hungry cowards, Alberich a spluttering bully, Wotan a silent observer, conspicuously turning his back at each moment of confrontation, letting the fast-talking, foxy Loge (Peter Bronder) do his dirty work for him.

Matthew Best, who extraordinarily also manages a parallel career as a conductor, cut an imperious figure of stoat-like arrogance as the flawed god, handling the vocal range with skill. Anne Mason's Fricka, Rachel Hynes's bright, touching Freia and Michael Druiett's Donner all deserve mention. It was sung in German. Whatever anyone tries to tell you, this is the only way to hear this work's authentic sound. The spitting alliterations and percussive consonants of Wagner's eccentric verse are inseparable from his musical line. The history of concrete poetry, it could be argued, begins with the Rhinemaidens' untranslatable call, a miasma of vowel sounds which are all part of Wagner's unified sound world: 'Wallala! Lalaleia! Leialalei! Heia! Heia! Heia!'. Next stop, Glasgow. Go. Next opera Die Walküre at Edinburgh next year.

The Music of the Millennium series reached the fifteenth century with a pristine account by the Hilliard Ensemble of works by Josquin and Dufay. The decision to perform parts of different masses by each might be thought as bad as swapping between movements of string quartets by Haydn and Mozart in order to compare them. Instead, the points of comparison were fascinatingly revealed and as quickly shot to pieces. Thus the glittering ingenuities of Josquin's Ut phoebi radiis contrasted sharply with the silken smoothness of Dufay's Missa Ave Regina Coelorum (Kyrie and Gloria). Yet the works that followed demonstrated the immense variety and ingenuity of these two composers, both of whom came from the Low Countries, served in the Papal Chapel in Rome and wrote some of the greatest masterpieces of the early Renaissance. The four male voices of the Hilliard earned thunderous foot-stamping applause from a capacity audience at Canongate Kirk.

A new musical stole the limelight on the Fringe. The Lost Domain, composed by John Moore with lyrics by Alex Went and Peter Fanning, reworks Alain Fournier's novel of youthful love and friendship, Le Grand Meaulnes , into an exhilarating piece of theatre complete with falling snow, rollerskating and ball scene. Cast and orchestra consisted of teenagers, mostly 16-year-olds (preoccupied off-stage with GCSE results), from Shrewsbury School which has staged regular Fringe events since 1995. Moore's score, using and extending Broadway musical conventions, follows one exuberant number with another. Krishan Nursimooloo as Augustin Meaulnes had compelling stage presence though his voice is still uncertain. Simon Hunka showed real lyricism as the handsome captain Frantz. Kerrie Fairclough as a gutsy Parisian whore and Peter Nichols as the lame Henri had real talent. Energy and discipline of this quality, rare enough on the professional stage, are all the more astonishing among a group of non-specialist teenagers, for most of whom this was a one-off adventure into show business which will have to last a lifetime. They give one performance at the Royal Opera's Linbury Studio in January. They deserve more.